Home Loans 101

 There are many different types of home loans. Each has their place and purpose. It's important to know there are more options than just the old conventional with 20% down. This talk about them!

• Conventional
• FHA
• VA
• USDA
• Bridge

 Most lenders will give better financing terms to borrowers that can put a 20 percent down payment on the purchase.  If you are unable to do so, you will likely be required to purchase Private Mortgage Insurance (PMI) and perhaps pay a higher interest rate.

It's very important to have a trusted lender run multiple loan options for you to better explain the differences so you can make an informed decision.

  A letter of preapproval from a lender shows that they have checked all your documentation and are prepared to make you a loan. Getting preapproved

prior to starting your home search saves you time by:

• Keeping you focused on viewing only the homes that are within your budget
• Helping you obtain your financing more quickly once you find a house you want to buy

  It’s important to check your credit report before you see your lender because:

• Lenders check this to determine the amount of loan you qualify for
• It allows you to correct any mistakes in the report before lenders see it
• If there are any blemishes in your report that are not errors, you should be prepared to explain them to your lender

 You are entitled to one free request each year from each of the three credit bureaus. Click here to check it out!

  You may want to check your credit score at the same time you check your credit report (usually for a fee). This score influences how much lenders are willing to loan to you and at what interest rate.

While there are many apps these days that will tell you your "credit score", they don't pull all the same information as lenders or even the credit bureaus. Some of these apps are known to be off as much as 100 points! Wow, right?!